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analysis · intermediate

Implied volatility

Implied volatility is the volatility level embedded in an option’s market price using an options pricing model.

Rising IV usually makes option premiums more expensive for the same strike and expiry.

India VIX is a popular gauge of near-term implied volatility on Nifty options.

IV crush after events can reduce premium even if the underlying barely moves.

Traders compare IV with realised volatility to judge whether options look rich or cheap.

Part of the Market Pulse Term of the Day series — factual market vocabulary, not investment advice.